Are physical stores making a comeback?  Is it all about the product?

Are physical stores making a comeback? Is it all about the product?

The short answer is yes.

The power of e-commerce that started over a decade ago, for now at least, appears to have peaked.

According to the Federal Reservee-commerce accounted for 16.4% of all US retail sales in mid-2020. That slice of the pie has been shrinking in the year since then, to 14.5%.

Today, brands are refocusing on adding or expanding a physical presence, “to enhance the retail experience they offer their customers,” according to e-commerce platform Shopify (which recently laid off 10% of its workforce, or about 1,000 employees). “DTC (Direct-to-Consumer) brands are now increasingly looking at traditional stores as a competitive advantage.”

E-commerce, once it became a business model with low upfront investment, became a stopping point for marketing dollars. From about $9 per customer (CAC) in 2013, current estimates of CAC are $45, and you’ve heard numbers as high as $200.

Even worse, third-party cookies that allowed marketers to track users and deliver targeted ads are being phased out.

According to digital commerce magazine Digital Information World, Google plans to rid the Chrome browser of cookies in the next year or so, and Apple has already restricted cookies to its Safari browser. In the European Union and California, lawmakers are adopting restrictive rules designed to protect individual privacy.

What is happening here seems to be a return to the basic rules of human nature.

According to Ricardo Bellemare of Microsoft, As quoted by Shopify“Consumers want the physical shopping experience they couldn’t get during the pandemic, but also because e-commerce hasn’t made product discovery as easy as walking down the aisle of a store or looking at a store display to see something you want to get and buy.”

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E-commerce has made retail seem easier than it is. As it turns out, good old-fashioned common sense will prevail today. Get a good product and customers will want to come and then come back. It seems obvious. Another common-sense approach is to listen to your customer. Feedback and research from consumers is what differentiates companies that succeed from those that don’t.

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